Note 3 - Stock-based Compensation

9 Months Ended

Apr. 02, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 3 – Stock-Based Compensation

The Company has a Long Term Incentive and Share Award Plan, which is more fully described in Note 12 and Note 13 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 3, 2022, that provides for the grant to eligible employees, consultants and directors of stock options, restricted shares, and other stock-based awards.

The amounts of stock-based compensation expense recognized in the periods presented are as follows:

	Three Months Ended					Nine Months Ended
	April 2, 2023		March 27, 2022			April 2, 2023		March 27, 2022
	(in thousands)
Stock options	$	982	$	(57	)	$	1,575	$	(39	)
Restricted stock		1,505		1,564			4,366		6,842
Total		2,487		1,507			5,941		6,803
Deferred income tax benefit		609		372			1,455		1,678
Stock-based compensation expense, net	$	1,878	$	1,135		$	4,486	$	5,125

Stock-based compensation is recorded within the following line items of operating expenses:

	Three Months Ended				Nine Months Ended
	April 2, 2023		March 27, 2022		April 2, 2023		March 27, 2022
	(in thousands)
Marketing and sales	$	1,144	$	600	$	2,718	$	2,933
Technology and development		199		63		506		274
General and administrative		1,144		844		2,717		3,596
Total	$	2,487	$	1,507	$	5,941	$	6,803

Stock-based compensation expense has not been allocated between business segments, but is reflected as part of Corporate overhead (see Note 12 - Business Segments). 

Stock Options

The following table summarizes stock option activity during the nine months ended April 2, 2023:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)		(in thousands)
Outstanding at July 3, 2022		-		$	-
Granted		2,346,416		$	8.59
Exercised		-		$	-
Forfeited		(42,412	)		8.59
Outstanding at April 2, 2023		2,304,004		$	8.59		9.6	$	6,705
Exercisable at April 2, 2023		-		$	-		-	$	-

As of April 2, 2023, the total future compensation cost related to non-vested options, not yet recognized in the statement of income, was $10.2 million and the weighted average period over which these awards are expected to be recognized was 2.6 years.

Restricted Stock

The Company grants shares of Common Stock to its employees that are subject to restrictions on transfer and risk of forfeiture until fulfillment of applicable service and performance conditions and, in certain cases, holding periods (Restricted Stock). The following table summarizes the activity of non-vested restricted stock awards during the nine months ended April 2, 2023:

	Shares			Weighted Average Grant Date Fair Value
Non-vested at July 3, 2022		929,709		$	21.82
Granted		735,754		$	8.44
Vested		(372,415	)	$	17.66
Forfeited		(51,638	)	$	19.56
Non-vested at April 2, 2023		1,241,410		$	15.23

The fair value of non-vested shares is determined based on the closing stock price on the grant date. As of April 2, 2023, there was $12.2 million of total unrecognized compensation cost related to non-vested, restricted, stock-based compensation to be recognized over the weighted-average remaining period of 2.7 years.